Growing Gambling Culture

The gambling culture in Meru, Kenya continues to thrive. Community members have become addicted to gambling. Many of them were drawn in by their initial successes and good fortunes. There are several unregulated gambling dens located throughout Meru County. The community concern is that young people seem to be frequenting them.

The government attempted to curb the issue. Illegal gambling dens were shut down by Fred Matiang’i, the Interior Cabinet Secretary. 

Government Crackdown 

Mr Matiang’i ordered regional and county commissioners to confiscate all unlicensed gambling paraphernalia. Despite the threat of incarceration, residents continue to gamble.

In Kenya, gambling is only permitted in licensed betting and gambling premises. On these premises, strict regulations must be adhered to. Persons under the age of 18 are not allowed to take part in gambling of any kind. 

Gambling machines have come back with a vengeance. This is evident in the Gitimbine and Makutano townships of Meru. Residents have raised their concerns over the return of gambling, and for young people wasting their time and money. Even as they voice their complaints, gambling machines remain in licensed bars throughout the county.

John Mutuma, a resident of Gitimbine, said that some bars have cordoned off areas with locked rooms. These rooms are allocated to unabated gambling. Mercy Murithi, Meru Municipality Chief, admitted that illegal betting is a problem in the area. The youngsters frequenting illegal casinos are also not observing COVID-19 health protocols. She expressed her fears of these dark, congested areas in which the virus can spread. Despite the raids and destroying of the gambling machines, traders continue to replace them with new ones. 

Betting Control and Licensing Board Takes Action

Mr Peter Mbugi is the Chief Executive Officer of the Betting Control and Licensing Board (BCLB). He has acknowledged the complaints received from residents. He said that the BCLB would be sending officers there to inspect these businesses. In a phone interview, Mr Mgubi added that the machines are illegal as they are not certified. 

The sports betting and gambling industries have seen a surge in popularity in recent years. This comes amid very aggressive marketing campaigns led by betting firms. Both levels of government have been unable to curb the purchasing and regulation of slot machines in the region.

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Spencer Okach is BetLion’s Regional Managing Director. He said that financial legislation in the country has changed. He also noted that this is a key reason for Kenya’s market being unstable for betting operators. 

The country’s Finance Bill changes annually. This makes it hard to plan ahead. Okach acknowledged that the Bill is currently under review, making the market unpredictable. 

Imran Bukhari, CEO of Truware, also commented on the regulations. He said that companies interested in launching in Kenya must be nimble. This will help navigate regulatory hurdles. Gambling products should be able to switch between territories where they operate. This will help negate the pressure. 

Gambling Opportunities Galore

Okach maintained that despite the setbacks, Kenya remains a ‘land of opportunity’. He said that compared to other jurisdictions, South Africa and Kenya are the most stable. 

He noted that Kenya is the first ‘market where people have accepted mobile money quite openly’. Kenyans trust mobile money, and this provides opportunities to betting operators. It also helps to offset the volatile regulatory conditions. 

Dominic Field, the LiveScore Group Nigeria’s Country Manager, agreed. He noted that Kenya’s regulatory background is unstable but presents opportunities for operators. Field argued that because the market is volatile, it’s best suited to bigger companies. He believes that they can better absorb shakeups.

Field also asserted that if a product is unique, it stands out in a competitive industry. Differentiation is essential.

John Gordon, CEO of Incentive Games, expressed the importance of a product-centric approach. He stated that product localisation is recognised throughout the continent. Kenya is a huge opportunity in Africa, and understanding the demographic is key.

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Dr Cassiel Ato Forson, an MP for the NDC, expressed his disappointment in the government for not banning betting.

Mr Mireku claims that the gaming community generates millions in revenue. This money goes to the government and is used for development. He added that he does agree that more regulations must be added. Not only will this protect stakeholders, but it will also generate more revenue.

Looking To The Future of Gambling

The CEO shared some innovations and stated that the Commission is on a mission. It wants to hook better companies onto a single platform. The aim of this is to track their activities and ensure they regard regulations.

He shared his views on the subject during an interview. Hosted by Samuel Eshun on the Happy Morning Show, it aired on e.TV Ghana and Happy98.9FM.

In its 2021 Budget presentation, the government estimated a revenue loss of over GHS 300 million. This is due to leakages in the gaming industry.

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Nigeria’s size and status mean that financial and legal decisions affect Africa. This has now led to upset. The upset is due to the government tackling offshore and unregulated gambling operators. 

A Growing Problem

Nigeria’s gambling industry is one of the fastest-growing in the world. This has presented authorities with the challenge of regulating it. Since 2019, Nigerian players could access offshore online casinos with little official supervision. But this resulted in problems. Tax evasion, capital flight and illicit financial transactions have become common. 

Promoting Partnerships 

Nigeria’s Financial Intelligence Unit has united with the Nigerian Lottery Regulatory Commission. Together, they’ll create a task force. This task force will crackdown on gamblers using illegal platforms. 

There was a past partnership between the NLCR and Corporate Affairs Commission (CAC). This partnership aimed to regulate to the gambling industry. But it was not successful. This led to the recent harsher approach. NLRC director-general Lanre Gbajabiamila commented on the partnership. He said that the current alliance is addressing the issues with increased urgency. 

Lessons From Australia

Australian authorities faced a similar issue with offshore casino operators. They attempted to block sites via internet service providers. When this failed to fix the problem, they had to take a stricter approach. 

Nigerian Growth

The Nigerian gambling industry has grown fast over the past decade. Now, it serves many purposes. Entertainment, job creation and revenue generation are all considerations. Despite this, the issues that come with a lack of regulation will persist. More so if different authorities fail to coordinate their plans and efforts.

Fears of Corruption

As with many activities that involve money, gambling can attract those up to no good. In the unregulated offshore casino playground, this is common. There are fears of money laundering, illegal money generation and even terrorism. These are of great concern to authorities. The legal status of gambling in Nigeria is also quite unclear. Laws and regulations differ according to the type of game, as one example. 

Government Stepping In

Nigerian authorities are hoping the MoU will bring much-needed clarity. And that it will offer better oversight of the gambling industry. While this partnership sounds promising, Nigerian authorities may battle. They have a history of not seeing eye-eye when it comes to gambling and industry regulation. 

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It also calls for a dedicated Board to be introduced to contend with the rise in the zone’s population, says Abraham Mwangi Njahia, Elected Member of the Nairobi City County Assembly.

New Chairperson Needed

As part of this legislative overhaul, the Governor will be accorded the power to appoint a Non-Executive Chairperson. This individual will be assisted by a Director in charge of supervising betting, lotteries, and gaming. The latter will be tasked with approving licenses and issuing these permits and will additionally be able to suspend or revoke the same. 

Fines Outlined

The Bill suggests fines and penalties up to a maximum of Ksh1 million. Public lottery permits will cost Ksh4 million each and a fee of Ksh600 000 will be payable for betting licenses. Casino operators will be subject to a grant fee of Ksh100 000 along with a Ksh10 000 renewal charge. This will be in addition to an annual payment of Ksh300 000 and a Ksh200 000 tranfer fee.

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Many African countries have followed the example set by America and various European countries and started regulated all forms of online gambling. Taxation on these activities brings an undeniable boost to local economies and this has become even more valuable in the lockdowns instituted to control the spread of the novel coronavirus COVID-19 worldwide. 

But certain countries, like Malawi, have yet to make an effort to regulate online betting and gambling. The growing interest in both these activities, however, as well as the large potential tax revenue, means that this will not be the case for much longer. 

The Situation as it Currently Stands

Malawian gambling laws are very moderate, especially in comparison to other countries on the continent. All gambling is 100% legal and citizens are free to play casino games, bet on different sports and other events provided by sportsbooks, and buy Lottery tickets. 

The land-based casino scene is based largely in Lilongwe, the country’s capital, where Pirates Casino is located. It’s the biggest establishment of its kind in Malawi, boasting 9 card tables along with many variations of Roulette and slots machines in their hundreds. 

Sports betting is also a vastly popular pastime in Malawi, with international sports in the no. 1 position. European Football takes centre-stage, with the English Premier League specifically being a favoured betting option. As much as local Football is well-liked in the country, Malawian sportsbooks, by and large, ignore it, however. 

The Malawian National Lottery is a huge hit with nationals, too, regularly attracting players upwards of 15 million, making it one of the nation’s favourite types of entertainment. 

The Future of Online Gambling Regulation

The Malawian government will almost certainly begin measures to start legalising and regulating all forms of online gambling very soon. When one takes into consideration the recent legislation the USA has put into place, resulting in states like New Jersey now contributing vast sums in the form of tax revenue, it’s a wonder they’ve not already made a more definite start. But they’re not alone in failing to harness this kind of additional income. South African online casinos are still technically unlawful, although the legal framework targets operators rather than players.

2019 saw a request for proposals put out in Malawi, allowing betting and casino brands to apply for permits to run. This is an indication that these options will be available to Malawians sooner rather than later. 

The Question of Legality

Malawi is largely free of the social stigma gambling attracts in places like Cambodia, North Korea, Qatar, Singapore, and the UAE. A Gambling Board was created in 1996 and this pastime has been fully regulated by 1998. It was during this period that all casinos, lotteries, and sportsbooks became subject to taxation with a flat 12.5% gross revenue levy instituted. These laws have not been updated since then, however, to take new technology and digital gambling trends into account. 

There has been a single update, in 2015, when the Lottery received its permit. Online gambling remains unregulated and it’s technically not unlawful to enjoy it. There is no criterion for prosecution whatsoever. The single online bookmaker based in the country, Premier Bet Malawi, is a firmly established land-based sportsbook. Anyone looking to play casino games or bet online has to use sites based outside of Malawi to do so. 

Malawi instituting regulated online gambling at some stage is bound to happen, but their legal framework has been slow to adjust in the past. Until then, nationals will have to settle for playing and betting at land-based venues or using international operators. 

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Bryan Arumugam, the spokesperson for the NGB, warned that internet cafés providing online gambling access are not licensed to do so. This means that anyone engaging in this activity is not properly protected. They are thus prey to their payments being declined and betting and game outcomes being tampered with. 

Arumugam stated that these operators simply vanish when authorities appear on the scene, leaving bettors and players high and dry. Whenever police raid their facilities, remote servers are used to shut systems down and conceal evidence of wrongdoing. The main targets for these illicit organisations are the unemployed and low-income members of society desperate for an additional source of income. 

Play at Brick-and-Mortar Establishments

Several forms of land-based gambling are totally legal, so players need not resort to breaking the law. The majority of the most popular casino games, Bingo, slots, and sports betting can all be participated in at many licensed venues across the country. 

All these forms of wagering require that operators obtain licenses from the necessary provincial authority. This means that players can be sure they’re not being cheated. 

South Africa has a fully developed, completely regulated land-based gambling industry which generated R30+ billion in 2019. This sector is also responsible for over 35 000 jobs for locals, and legal venues lose massive amounts of revenue due to their illegitimate counterparts. 

Online Gameplay Too Difficult to Police

The 2004 National Gambling Act is still in force despite various attempts to dislodge it. One notable move to update it was made by the Democratic Alliance in 2016 but this did not succeed. The bill ended up being rejected due to fear of the detrimental effect it would have on the general public. 

Arumugam explained that online gambling and betting is still outlawed because it’s so much more difficult to monitor and regulate. Brick-and-mortar venues already have the necessary controls in place and are more able to ensure players are of legal age and are not developing issues around gambling. 

Wagering online, however, is possible 24 hours a day and there is markedly less scrutiny as to who’s betting and when. Online gamblers additionally have recourse to using their credit cards to fund their games and bets and wagering on smart devices could interfere with their work responsibilities. 

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Anthony revealed that, although the operation only began on Thursday the 10th of September, 13 offices have already been targeted. This list is made up of five branches each of Bet9ja and King Bet, two of AccessBET, and one of Derby Lotto. 

Amended 2020 Legislature

This year’s revised Kaduna State Tax Codification and Consolidation Law decrees that gaming organisations must be registered and have obtained a licensed before they can operate. 

Section 86 orders that all companies that wish to offer gambling and betting services need to apply in writing for an operating license. This is along with paying a non-refundable ₦400 000 registration fee. Thereafter, Section 91 imposes a tax of 10% on each stake and every winning amount. This is to be immediately subtracted and sent monthly to KADIRS by each licensed gaming firm in the state. 

No Mercy for Illegal Operators

Anthony stated that there are an estimated 1 500 gaming venues across the state that are currently operating without the proper permission. He added that the clampdown will continue until all of them have been brought to book, explaining that all operations need to be regularised and licensed for offering these kinds of services. 

KADIRS Executive Chairman Zaid Abubakar, in turn, reported that, above and beyond operating unlawfully, these rogue businesses owe tax to the tune of ₦500 million. He went on to detail the debt owed by K.C. Gaming Networks, Bet9ja owner, BetKing, and AccessBET as ₦325 million, ₦68 million, and ₦33 million respectively. 

Abubakar also revealed that these organisations are earning roughly ₦2 billion every month from the state but that not a single kobo is being seen back in the form of tax. He stated that all operators are legally bound to integrate their activity into the KADIRS Service Software. 

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Amid Kenya’s harsh crackdowns on sports betting giants SportPesa and Betin, the country has licensed several industry newcomers. This has prompted the theory that the government may have been deliberately trying to crash the two stakeholders’ monopoly on the gambling sector.

How Kenya Brought Major Bookmakers Down

Until September 2019, Betin and SportPesa controlled a combined total of 85% of Kenya’s gambling industry. When new taxation laws were imposed, the government accused the betting behemoths of not complying with the regime changes.

A 20% Excise Duty was also imposed on all wagers that were placed, and the firms were also blamed for fuelling money-laundering and promoting moral decay across the Kenyan nation. Following protracted legal disputes with the state, the betting operators closed their doors. 

Serious Economic Fallout

When SportPesa and Betin shut up shop, the economic effect on thousands of Kenyans was considerable. Not only did some bettors lose money that was still being held in their betting site accounts, but local sporting clubs saw valuable sponsorship deals cancelled.

In addition, the firms sustained thousands of employees, whose have now lost their jobs. Smaller sportsbooks including Betpawa, Premierbet, Cysabet and Elitebet were forced to close too, and this impact has also been felt keenly.

New Firms on the Block

Even with the accusations of compliance failures and “promotion of moral decay”, the Betting Control and Licencing Board continues to issue permits. Active bookmakers in the country now number over 30, and newcomers include Triple5 Bet, Bet254, 22bet and Flooks. 

Their entry into the market at the same time as the authorities’ crackdown, and the scrapping of the punitive Excise Taxation with President Kenyatta’s signing of the 2020 Finance Bill in June and has led some insiders to conclude all these actions were taken to force established operators out.

The question being asked most frequently by insiders now is, why the authorities would take these actions and what they’re planning. There is still hope that some of the operators will return to the market, but whatever developments happen next remain to be seen.

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Public Health Nigeria Executive Director, Dr Oche Otorkpa, has called for mandatory health hazard warning labels to be placed on all online bookmakers and casinos, and to be displayed at land-based bookmakers.

Online operators would also be required to issue a compulsory signoff to all customers, confirming that they understood the potential long-term damage that gambling could cause their lives and their families’ lives.

Otorkpa has asked the Federal Government and its relevant agencies (including the Ministry of Youth and Sports and the Federal Ministry of Health) to consider his demand as a matter of urgency. He pointed to the cigarette pack warning labels that the United States has enforced since 1965.

Smoking rates dropped dramatically after tobacco companies were required to display the warning labels on their products, the public health practitioner says, and adds that relevant health indicators had also significantly improved since that time.

Easy Wins Tempt Poverty-Stricken Youth

Large and clearly visible warning labels and signs could have the same effect on gambling as on smoking behaviour, Otorkpa feels. He continued that online betting addiction has increased Nigeria’s mental crisis, destroying lives and careers, decimating life savings and tearing families apart.

The crisis, the doctor continues, is so dire that parents addicted to gambling spend their money on casino games and sports bets rather than on their children – with the result that their offspring are malnourished, uneducated and vulnerable.

At the same time, says Otorkpa, young people are using their own money for gambling rather than education. He explains that students at secondary and tertiary institutions are now often seen begging for money on the streets, after losing their tuition and school fees to casinos and bookmakers.

Statistics show that around 60 million Nigerian citizens aged 18 to 40 years old actively participate in online sports betting. They spend an average of ₦3,000 each, and ₦2 billion in total, on the activity every day. With the high levels of unemployment and financial insecurity, it’s understandable that so many people are looking for a get-rich-quick scheme.

Gambling’s Pros and Cons Must Be Balanced

With the dire economic environment making irresponsible gambling behaviour even more tempting, Otorkpa appears to be saying, the suggested warning labels are even more imperative. He lists job loss, failed relationships, severe debt, depression and anxiety as common results of excess betting.

The extent and nature of the dangers of irresponsible gambling are clear, and the warning labels could go some way to prevent them. However, other steps must be taken to mitigate unemployment and educate players and bettors.

With the amount of revenue that casinos and sportsbooks bring in, they’re an important income generator for Nigeria. Authorities must determine how to maximise the industry’s advantages while minimising its disadvantages – which is never an easy line to walk.

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